By draks on Nov 28, 2007
Verizon announced today that they are opening their network to all compatible phones and services. For years, Verizon has had the "walled garden" business model where they control everything. This means that all services have had to go thru Verizon so you could not acquire applications or ringtones unless you paid Verizon. As a result, it cost more to download a stupid 15 second ringtone than it cost to download the entire song (in high quality). Remember when Verizon offered a service to backup your contacts OTA for...$3 / month? That kind of price gouging didn't work, no one bought it and eventually, they offered it for free because it caused them less work when someone had to replace a phone. The walled garden model spilled over to what Vzn let consumers do with their phones. My phone has bluetooth, but it only works with a headset - I cannot sync data wirelessly with it! Why? Well Verizon wants me to sync my data with their servers for a fee and then resync it w/ my phone. It will be a cold day in hell before I do that and I take great pleasure in syncing my device with a cable knowing that eveytime I do I am sticking it to the man! It is this kind of perversion of the market that Verizon lived on and I and everyone else hated it.
This latest move, of course, is clearly a reaction to the market in which Apple opened their iPhone and Google is going to offer SAAS via the Web. The only way for Verizon to stay relevant in this market where people have access to free services, is to open their network. This move parallels the open source movement - make it open and they will come and innovate. By opening the network, Verizon will encourage development of new and innovative services that will provide me something I want at a reasonable price. For Verizon, this means an erosion of their business model (think large holes in the walled garden) as they have to rely more on revenue from moving bits and less on revenue from overpriced applications and services. Tearing the wall down will ultimately be good for everyone. The really useful services from Verizon will continue to sell, new services and phones will bring more people to their network and drive volume on their towers thus lowering their costs (which will ultimately be passed onto us thru lower prices or more minutes).